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Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-5677 May 25, 1953

LA CAMPANA FACTORY, INC., and TAN TONG doing business under the trial name "LA CAMPANA GAUGAU
PACKING", petitioners,
vs.
KAISAHAN NG MGA MANGGAGAWA SA LA CAMPANA (KKM) and THE COURT OF INDUSTRIAL
RELATIONS, respondents.

Ceferino de los Santos, R., Ceferino de los Santos, Jr. and Manuel V. Roxas for petitioners.
Carlos E. Santiago for respondent union.

REYES, J.:

Tan Tong, one of the herein petitioners, has since 1932 been engaged in the business of buying and selling gaugau
under the trade name La Campana Gaugau Packing with an establishment in Binondo, Manila, which was later
transferred to España Extension, Quezon City. But on July 6, 1950, Tan Tong, with himself and members of his
family corporation known as La Campana Factory Co., Inc., with its principal office located in the same place as that
of La Campana Gaugau Packing.

About a year before the formation of the corporation, or on July 11, 1949, Tan Tong had entered into a collective
bargaining agreement with the Philippine Legion of Organized Workers, known as PLOW for short, to which the
union of Tan Tong's employees headed by Manuel E. Sadde was then affiliated. Seceding, however, from the
PLOW, Tan Tong's employees later formed their own organization known as Kaisahan Ng Mga Manggagawa Sa La
Campana, one of the herein respondents, and applied for registration in the Department of Labor as an independent
entity. Pending consideration of this application, the Department gave the new organization legal standing by issuing
it a permit as an affiliate to the Kalipunan Ng Mga Manggagawa.

On July 19, 1951, the Kaisahan Ng Mga Manggagawa Sa La Campana, hereinafter to be referred to as the
respondent Kaisahan, which, as of that date, counted with 66 members — workers all of them of both La Campana
Gaugau Packing and La Campana Coffee Factory Co., Inc. — presented a demand for higher wages and more
privileges, the demand being addressed to La Campana Starch and Coffee Factory, by which name they sought to
designate, so it appears, the La Campana Gaugau Packing and the La Campana Coffee Factory Co., Inc. As the
demand was not granted and an attempt at settlement through the mediation of the Conciliation Service of the
Department of Labor had given no result, the said Department certified the dispute to the Court of Industrial
Relations on July 17, 1951, the case being there docketed as Case No. 584-V.

With the case already pending in the industrial court, the Secretary of Labor, on September 5, 1951, revoked the
Kalipunan Ng Mga Kaisahang Manggagawa's permit as a labor union on the strength of information received that it
was dominated by subversive elements, and, in consequence, on the 20th of the same month, also suspended the
permit of its affiliate, the respondent Kaisahan.

We have it from the court's order of January 15, 1952, which forms one of the annexes to the present petition, that
following the revocation of the Kaisahan's permit, "La Campana Gaugau and Coffee Factory" (obviously the
combined name of La Campana Gaugau Packing and La Campana Coffee Factory Co., Inc,) and the PLOW, which
had been allowed to intervene as a party having an interest in the dispute, filed separate motions for the dismissal of
the case on the following grounds:

1. That the action is directed against two different entities with distinct personalities, with "La Campana Starch
Factory" and the "La Campana Coffee Factory, Inc.";

2. That the workers of the "La Campana Coffee Factory, Inc." are less than thirty-one;

). There were also women employees working paper wrappers for gaugau. "(1) that the petitioner La Campana Coffee Factory. The Court found out also that there were 16 trucks used both for the delivery of coffee and gaugau.. E. there is only one management for the business of gaugau and coffee with whom the laborers are dealing regarding their work. (2) that the suspension of respondent union's .000 cans to be used as containers for coffee. 103. and for the gaugau factory (Exhibits O-2. J-1. only 5 of whom are members of the respondent union and therefore the absence of the jurisdictional number (30) as provided by sections 1 and 4 of Commonwealth Act No. in the same place there were about 3. This permit was suspended on September 30. Tan Tong. and. It is to be noted that before July 21. and. the union president invited the Court to examine the contents of delivery truck No. All the laborers working in the gaugau or in the coffee factory receive their pay from the same person. the company began making separate payrolls for the coffee factory (Exhibits M-2 and M-3. the Court of Industrial Relations denied the said motions in its order of January 14. later joined by the PLOW. (same as La Campana Coffee Factory Co. 1951. and J-2). F. and 4. 1951. There has been only one payroll for the entire La Campana personnel and only one person preparing the same — Miss Natividad Garcia. Several hearings were held on the above motions. on July 17. because if found as a fact that: A. There is only one entity La Campana Starch and Coffee Factory. it is to be noted that before the certification of the case to this Court on July 17. when this case forwarded to this Court. the petitioner Kaisahan Ng Mga Manggagawa Sa La Campana. While the coffee corporation is a family corporation with Mr. for the reason.) Their motion for reconsideration of the above order having been denied. and children as the incorporations and stockhelders (Exhibit 1). of the record). the payrolls for the coffee factory began with No. 1951 the Court has found the following: In the ground floor and second floor of the gaugau factory there were hundreds of bags of raw coffee behind the pile of gaugau sacks. Tan Tong. . the packages of gaugau(Exhibit K). and held that: . It is not true that. That there is an existing valid contract between the respondent "La Campana Gaugau Packing" and the intervenor PLOW. B. while the dispute between the parties was pending before the Court. (Annex G. 1951. Mr. the filing of action against the Ka Campana Starch and Coffee Factory is proper and justified. Inc. secretary of Mr. 1952. Hence. and they are transferred from the gaugau to the coffee and vice-versa as the management so requires. . filed the present petition for certiorari on the grounds that the Court of Industrial Relations had no jurisdiction to take cognizance of the case. propriety and manager of the Ka Campana Gaugau Factory. secretary of Mr. To show that those trucks carried both coffee and gaugau. But after the case at bar was certified to this Court on July 17. the coffee payrolls all began with number "41-Maria Villanueva" with 24 or more laborers (Exhibits M and M-1). his wife. according to them. there were found inside the said truck boxes of gaugau and cans of coffee. had not yet been issued. 1951. 1951. the La Campana Gaugau Packing is merely a business name (Exhibit 4). Inc. O-3 and O-4). 1951. Miss Natividad Garcia. T-582 parked in a garage between the gaugau building and the coffee factory. That the petitioning union has no legal capacity to sue. According to the contract of lease (Exhibit 23). the advertisement in the delivery trucks (Exhibit I-1). C. whereas beginning July 21. 3. where-in the petitioner's members are contracting parties bound by said contract. 1-Loreta Bernabe with only 14 laborers (Exhibits M-2 and M-3). the petitioner's permit. and upon examination. leased a space of 200 square meters in the bodega housing the gaugau factory to his son Tan Keng Lim. 1951. But the lease was executed only on September 1. and delivery forms (Exhibits J. because its registration as an organized union has been revoked by the Department of Labor on September 5. Tan Tong and La Campana Coffee Factory. and on the basis of the evidence received and the facts observed in the ocular inspections. (Exhibit M- Intervenor. in the course of which ocular inspections were also made. 1951. D. manager of the La Campana Coffee Factory. During the ocular inspection made in the factory on August 26. page 55. as shown by the signboard (Exhibit 1). Tan Tong. the cashier.. as an independent union. had a separate permit from the Department of Labor. for the very Exhibit MM- Intervenor regarding the permit. With regards to the alleged lack of personality. conclusively shows the preexistence of said permit. Inc. has only 14 employees. Tan Tong.

is in reality owned exclusively by Tan Tong and his family. one management and one payroll. section 4. NLU. . as also found by the industrial court. when the person who was discharging the office of cashier for both branches of the business began preparing separate payrolls for the two. that is. A. but they do contend that the industrial court has no jurisdiction to try the case as against La Campana Coffee Factory. — The doctrine that a corporation is a legal entity existing separate and apart from the person composing it is a legal theory introduced for purposes of convenience and to subserve the ends of justice. a corporation and the individual or individuals owning all its stocks and assets will be treated as identical. the laborers of the gaugau factory and the coffee factory were interchangeable. Inc. petitioners obviously do not question the fact that the number of employees of the La Campana Gaugau Packing involved in the case is more than the jurisdictional number (31) required bylaw..Arellano Law Foundation . the two factories have but one office. Pablo. L.. will be disregarded by the courts. by legal fiction. In view of all these.J. it should not be overlooked that.) In view of the foregoing. be extended to a point beyond its reason and policy. that is. True." As to the first ground. For once jurisdiction is acquired by the Court of Industrial Relations it is retained until the case is completely decided. Disregarding Corporate Entity. Jugo. The concept cannot. Jur. Bautista Angelo and Labrador. (13 Am. as found by the industrial court — and this finding is conclusive upon us — La Campana Gaugau Packing and La Campana Coffee Factory Co.. R. 162. 599. 34 A. The Lawphil Project . Tuason. 73 Phil. see Annotation 1 A. And above all. that is. As found by the Court of industrial Relations. there being more than 30 laborers involved and the Secretary of Labor having certified the dispute to the Court of Industrial Relations. Thus. C. Montemayor. is but a device to defeat the ends of the law (the Act governing capital and labor relations) and should not be permitted to prevail. 401. 374. Tan Tong and his family. 160-161. Feria. JJ. the attempt to make the two factories appears as two separate businesses. et al. 73 Phil. which has been introduced as a matter of convenience and to subserve the ends of justice cannot be invoked to further an end subversive of that purpose. . 213 and consequently. especially if the stockholders or officers of the two corporations are substantially the same or their system of operation unified. Manila Hotel Co.. s. and when invoked in support of an end subversive of this policy. the laborers from the gaugau factory were sometimes transferred to the coffee factory and vice-versa. Inc.) . In the first place. This jurisdiction was not when the Department of Labor suspended the permit of the respondent Kaisahan as a labor organization.. as one business though with two trade names. the coffee factory is a corporation and. 103). C.permit by the Secretary of Labor has the effect of taking away the union's right to collective bargaining under section 2 of Commonwealth Act No. (Ibid. with costs against the petitioner. its personality to sue for ad in behalf of its members. Inc. But it is settled that this fiction of law.. in an appropriate case and in furtherance of the ends of justice. (Manila Hotel Employees Association vs. the day the case was certified to the Court of Industrial Relations. are operating under one single management. when in reality they are but one. The second point raised by petitioners is likewise with-out merit. therefore. that court duly acquired jurisdiction over the case (International Oil Factory vs. L. though an incorporated business. the corporate entity being disregarded where used as a cloak or cover for fraud or illegality. A subsidiary or auxiliary corporation which is created by a parent corporation merely as an agency for the latter may sometimes be regarded as identical with the parent corporation.. 612. Paras.) In the present case Tan Tong appears to be the owner of the gaugau factory. concur. the petition is denied. Bengzon. R. because the latter has allegedly only 14 laborers and only of these are members of the respondent Kaisahan. This contention loses force when it is noted that. except after July 17. an entity existing separate and apart fro the persons composing it. And the coffee factory.